Gabriel Fariashttps://gabrielfariasiribarren.com/en/
Producto textil. Prendas. Accesorios.Fri, 06 Sep 2019 10:01:32 +0000en-US
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1 https://wordpress.org/?v=5.2.3La tecnologia digital de la moda circularhttps://gabrielfariasiribarren.com/en/la-tecnologia-digital-de-la-moda-circular/
https://gabrielfariasiribarren.com/en/la-tecnologia-digital-de-la-moda-circular/#respondMon, 29 Jul 2019 06:08:33 +0000https://gabrielfariasiribarren.com/la-tecnologia-digital-de-la-moda-circular/In this previous article – Circular Fashion – we provided and briefly analyzed the Accenture report “Circular x Fashion Tech Trend”. The international consulting firm found nine circular fashion technology concepts that can be used to generate sustainable value and to reach the next level of circularity. These concepts are divided into three main categories based on the features of the technologies used: digital, physical and biological.

The digital technologies of fashion are based on communication, electronics and IT. And this is this first category that we will analyze next.

Circular fashion is digital.

The fashion industry has just begun to unleash the potential of digital fashion technology concepts based on computer science, communication and electronics. These technologies are known for using more information intensity and physical resource connectivity than what the fashion industry has seen so far. We split the digital concepts of fashion technology into three groups: wereable items, circular models of consumption and the connected supply chain.

1. Wearables

Wearables are not only devices, but also connected clothing that influence our lifestyle.

Devices with wearable technology that have a positive impact on life quality, the social surroundings and the environment may include, for example, a fitness tracker that monitors health conditions.

By integrating wearables into fashion, it is possible to encourage the user to get involved and interact with the environment and in the end, to influence it. Tracking our own personal carbon footprint not only makes us more environmentally conscious. It also enables integrated solutions, such as suggesting local and ethical alternatives for stores. Energy needs could be met by integrating rechargeable batteries or even solar cells into a clothing item, making it an energy source for portable devices.

Connected clothing is very promising. In a digital tester, sensors can read tags or radio frequency identification threads (RFID) placed on the cothing the customer is testing, connected to an intelligent mirror. The customer can browse styling options, call a staff member to bring a different size, and even order additional matching clothing from inside the fitting room. All this to ensure that the customer gets the right size and that each shopping experience is well supported.

Sustainable impact

Higher probability of better utilization rates as a result of a better adaptation experience and informed and ethical purchasing decisions. In other words, customers only buy clothes they will use.

Greater awareness of the implications of one’s own behavior, eventually improving conscious consumption, reducing energy needs and waste.

Challenges to overcome.

Establish digital trust by protecting the integrity of each person while efficiently managing and utilizing an ever-increasing amount of data generated.

2. Circular consumption model.

Circular models have been around for centuries, but recently we have seen a significant change as new technologies allow the transformation from linear to circular fashion consumption models.

Customers are more aware than ever and demand more customized solutions. This trend is causing a shift from retailing of first-hand clothing, that is produced and sold in stores or online, to new models of consumption such as fashion as a service, where users can potentially only pay for the actual use of a selected item. Ultimately, it allows other users to share the clothing when otherwise, in a linear model; it would have been stored in a drawer.

This concept also includes the use of shared platforms that allow users to rent items, publish their own clothing for rental or sell. This approach increases the utilization rate of clothing throughout its life cycle.

In addition, the sharing economy is a new approach for doing business and challenges traditional ways of selling by connecting consumers to the resource, like a clothing.

This model of consumption prevents waste and allows clothing that would otherwise be underused to be monetized. Now, this transaction offers a temporary access instead of ownership. And at the same time, companies can stand out for their value added features, such as improved user experience, customer support and premium products.

Sustainable Impact.

Higher utilization rate because users select specific items and only pay for the actual use and then return them, this way clothes can be shared among multiple users.

Reduces waste of fabrics and natural resources used in production process by reducing the need to buy new clothes for a specific occasion.

Challenges to overcome.

There is a risk of a rebound effect where consumers start to consume more once it becomes “cheaper”, which will eventually cause consumption and waste levels to return to the levels we see today.

3. Connected Supply Chain.

With distributed database protocols, Blockchain enables a complete audit trail throughout the entire fashion value chain. In addition, the IoT allows clothing to be connected across the same value chain.

Until now, manual intervention was needed to recycle a piece of clothing due to limited information about the article. An effort was required to determine the materials used in the clothing and whether they could be recycled. In other words, in the past there was a barrier for automated recycling. In fact, statistics reveal that most of the clothing currently being discarded could have been recycled.

In a connected supply chain, information is available throughout the entire value chain. For example, placing RFID tags on clothing and inventory, provides opportunities for instant traceability, improved inventory management and automated recycling.

Naturally, a connected supply chain also generates extensive digital information, where analytics can be used to establish circular perspectives that enable more predictable ways of working.

Allows transparency and instant tracking of both material sources and social aspects, for example, knowing exactly under what circumstances a particular clothing has been manufactured.

More information available to final consumers, allowing them to make purchasing decisions with more information.

Challenges to overcome.

Since technology plays an increasingly important role in people’s lives, it is essential to ensure both privacy and security. The first relates to the risk that your personal data will not be kept private, and the second relates to the risk that a data breach will occur and your personal data will fall into the wrong hands. Finding the right balance in building digital trust throughout the connected supply chain is critical.

Let’s embrace the power of digital clothing and make fashion circular!

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https://gabrielfariasiribarren.com/en/la-tecnologia-digital-de-la-moda-circular/feed/0Fashion as a service and rental fashion to close the loophttps://gabrielfariasiribarren.com/en/fashion-as-a-service-and-rental-fashion-to-close-the-loop/
https://gabrielfariasiribarren.com/en/fashion-as-a-service-and-rental-fashion-to-close-the-loop/#respondMon, 22 Jul 2019 06:08:50 +0000https://gabrielfariasiribarren.com/moda-como-servicio-y-alquiler-hacia-el-close-the-loop/Continuing with the analysis of the previous article on The State of Fashion 2019 report, we will focus on the current fashion consumer and the changes they have experienced in the past few years.

While business models for second-hand, repaired, refurbished and rented items continue to evolve, the life span of fashion items is increasing. In different product typologies, consumers show clear intentions to drift away from traditional ownership of products towards new ways to access them.

Is the ownership of fashion items coming to an end?

The shift towards new ownership models in our sector is generated and driven by customers’ fervent desire for greater variety, sustainability and accessibility. And in this sense, the resale market, for example, could be larger than the fast fashion market within a period not much longer than ten years. Seeing this shift in consumer trends, startups should not be the only ones leaving their footprints on these segments: established fashion brands will speed up the pace of adopting new ownership models as they become more relevant to consumers.

The clear choices are: fashion as a service and rental fashion.

In an increasing number of item categories and in different industries, consumers are opting to rent rather than own the goods they use and enjoy. It is clearly an evolution in consumer behavior and forecasts indicate that this new approach will have an impact on fashion business in the coming years.

This new behavior, driven primarily by the greed for constant novelty of the younger generation, also embraces sustainability as a fundamental cause and value. Analyses have shown that the average customer now buys about 60% more clothing than 15 years ago. But those clothes are only kept half the time they used to be. For example, a survey in the UK found that one out of three young women considers clothes to be “old” after wearing them once or twice. One out of seven considers that it is not cool or they don’t like to be photographed with the same outfit twice. In summary, today’s young people desire more than anything else constant novelty and it is very likely that these new generations will accept the “churn” (cancellation fee on a service subscription) in their closets.

At the same time, they are more interested in sustainable clothing than consumers of earlier generations. The new system of rental, resale and refurbishment extends the life span of an item and offers the innovation that today’s consumers want.

What about luxury consumers?

The strategy adopted by luxury brands has been to increase prices in a significant way. Prices of jewelry and watches have doubled since 2005.Even high-income customers in the sector are looking for discounts and purchasing alternatives to get some relief.

These new trends and demands are driving the success of the new models of rental and second-hand purchase-sale. It is estimated that the ability of the leading players in the luxury market of fulfilling a greater desire for aspirational and innovative items, will place them in a prominent position during this year 2019 and the next year.

In several areas of today’s economy, a consumer is emerging and present who is more interested in accessibility than in final ownership of a product. When we observe this evolution, the logical question that arises in our sector and industry is: how can we participate and obtain benefits?

While established brands have ignored or belittled second-hand retail, startups have successfully entered the fashion rental and second-hand markets. Other luxury market players have acquired resale or rental businesses to control how those items are marketed on the second-hand market.

Some of these new competitors within the sector have ventured into refurbishment, taking advantage of the sustainability benefits it generates, recovering worn items for restoration or using materials to create new products on a clear path to the ultimate goal, circular fashion and close the loop. Phrases such as “The best thing we can do for the planet is to keep our clothes in use for longer and reduce their consumption” are becoming common practice among fashion brands and we will see their progression from now on.

Three game changers towards fashion service.

During this year, a couple of remarkable situations are happening and we are expecting to see a third one that would be very interesting.

First of all, the number of brands entering the rental, resale and renewal business model is increasing considerably – it’s startup fashion! Established players will progressively consider alternative ownership as a strength to be embraced or, at the very least, they will have to try out new collaboration models with retailers or industry start-ups.

Secondly, there is a remarkable increase in the number of “native rental” brands born exclusively for rental or subscription models.

Thirdly, we hope and we would be very pleasantly surprised to see a unicorn in this industry.

Bottom line.

There is no doubt that more and more fashion consumers will have a greater share of their wardrobes occupied by second-hand or rented products, especially for high-value items and accessories. Although traditional players should not be alarmed, we believe it is essential to identify and understand in depth the signals shown by young consumers who prefer to rent rather than own.

Here we will meet again, in the next post, to analyze the world of fashion!

]]>https://gabrielfariasiribarren.com/en/fashion-as-a-service-and-rental-fashion-to-close-the-loop/feed/0Automation creates commercial valuehttps://gabrielfariasiribarren.com/en/automation-creates-commercial-value/
https://gabrielfariasiribarren.com/en/automation-creates-commercial-value/#respondMon, 15 Jul 2019 06:06:28 +0000https://gabrielfariasiribarren.com/9757/In a previous article we analyzed the five automated technologies that trigger the neorelocalization of the apparel industry and lay the groundwork for fashion 4.0.Later, in Innovation Fashion Forum, I said: “what we have to do now, without further delay, is to make estimates”. Indeed, we must calculate the advantages generated by automation to verify whether the return of manufacturing to proximity is financially and economically viable compared to production in Asia.

What is the economic viability of automation?

In assessing the viability of automation, companies estimate the necessary capital investment and cost savings that these new technologies will generate throughout the production process and thus determine the economic implications for different product lines:

To what extent will a particular technology reduce delivery time?

What direct effect will it have on selling prices? And what about selling at full price?

What investment is required to adopt this new technology and in what timeframe can it be recovered?

Evaluation of automation in manufacturing

The evaluation of the automation technologies applied to the processes of cutting, sewing and finishing of basic jeans shows the extent to which the difficulty of automation varies throughout the CMT (Cut | Make | Trim) process.

At several stages of the manufacturing process, innovative technologies have not yet been widely implemented. This gives us a realistic view of the automation potential for the coming years. For example, robots for the automatic loading of the industrial washer, intelligent wearable support during production or automated handling of soft fabrics through sewing robots.

Assuming that all technologies currently under development are implemented, manufacturing time could be reduced by 40% to 70%. If we continue to look specifically at the case of jeans, processing time can be reduced from 36 to 20 minutes in a conservative scenario or even to 11 minutes in a more optimistic scenario. As sewing represents more than half of the working time in the standard jeans manufacturing process, sewing automation will be the biggest driver of labor reduction, accounting for 21% to 46%.

Saving time is saving money.

Taking into account the most conservative automation scenario and considering the current labor costs of each of the producing countries, when translating time savings into potential cost savings, they range from around 0.20 USD savings per jeans if the origin chosen is Bangladesh to 14.80 USD savings per jeans in the most optimistic scenario, assuming it is manufactured in Germany.Automation of denim manufacturing in Turkey, one of the main processing countries close to the European market, will achieve savings of between $1.30 to $2.00 per jeans, while the benefits of automation in Mexico, a lower-cost nearby market for the United States, will fall in the range of $0.60 to $0.90 per unit.

This confirms that through automation, denim production in Mexico becomes competitive, not only for relocation from China, but even for relocation from a low-cost market like Bangladesh. From a pure cost perspective, automation levels the field and makes Mexico competitive even when compared to low-cost origins. Even offshoring from China to the U.S. reaches a break-even point from a pure cost perspective in the optimistic scenario of a 70% reduction in working time.

Speed and flexibility generate greater commercial value.

The addition of commercial value to the financial scenario, generated by increased speed and flexibility from nearshoring and local manufacturing, further justifies the application of advanced manufacturing technologies – automation – in local and nearby origins.

According to the estimates of the international consulting firm, with a 5% increase in sales generated from nearshoring or local production, relocation from China or even Bangladesh to a supply base improved by automation in Mexico or the United States is economically viable.

For European markets, the economic viability of nearshoring or local production also improves when we add automation to the equation. But we must bear in mind that even taking the highest sales rates and the optimal automation scenario, the estimation does not always give us a positive result that justifies local production. For this reason in a previous article we confirmed that neorelocalization does not always mean local production but rather manufacturing in proximity.

How quickly can the prospect of automation become a reality?

As automation technology continues to evolve, overcome current barriers and become more affordable, the economic viability of nearby and local production by suppliers with advanced manufacturing will improve over time.

Together with the Institut für Textiltechnik, McKinsey analyzed the performance of production costs per unit in Asia, in the leading manufacturing markets near the U.S. and Europe, and in the U.S. and Germany for the coming years and as new automation technologies are implemented.

In the survey related to this work, 82% of respondents believe that simple garments will be fully automated by 2025, implying an 80% reduction in labor. 70% think it is very likely that more complex garments, such as dresses and jackets, will be significantly automated, resulting in a 40% reduction in manpower.

Within five years, semi-automatic factories could enable nearby production projects and generate other developments that mean new business models, such as the in-store factory. Within ten years, suppliers with fully automated factories could drive full local manufacturing. The most complex models will be developed using semi-automated processes within a decade, to such an extent that companies will be able to scale new high-margin business models that include mass customization.

Bottom line

Considering the history of automation technologies and their adoption, fashion brands and mass market retailers should not wait for innovations to advance. On the contrary, they should embark right now on the path towards a value chain focused on demand, on the total profitability of the product and on generating an important competitive advantage or they could risk losing contact with their consumers in the not too distant future.

Innovation Fashion Forum 2019

It has been a great pleasure for me to participate as a speaker in this incredible meeting 2019 with the theme:

Speed Factory: bringing production closer to decision making.

I hope my participation has added value!

Once again I would like to thank Modaes, Ifema and Mercedez Fashion Week for the opportunity and the trust they have shown!

If you provide us with your e-mail address, we will gladly send you the presentation showed in the conference.

Open your eyes, observe and analyze.

This is our call for each of us, fashion professionals, to be able to see the changes that are taking place. And with that same holistic perspective, let’s take advantage of all the incredible opportunities that change generates. If we add our creativity and talent to new technologies and innovation, we will ensure the future of our companies and that of fashion.

Startup Fashion

The same DNA that made fashion companies and brands successful is now a heavy burden that restrains them, and even extinguishes them.

Solution: Startup fashion! Think Startup! and do not let the day to day kill innovation.

Neorelocalization 4.0

Neorelocalization is local or nearby production to generate a fashion value chain focused on demand and full product profitability. Its foundational pillars are sustainability and Industry 4.0

Taking the first step

Widespread change across the industry demands precise decisions and immediate action. The disruptions ahead are so profound that the fashion players who seize the opportunities will generate such significant advantages that they will be very difficult to replicate.

]]>https://gabrielfariasiribarren.com/en/speed-factory-innovation-fashion-forum-2019/feed/0The five automations that launch fashion 4.0https://gabrielfariasiribarren.com/en/the-five-automations-that-launch-fashion-4-0/
https://gabrielfariasiribarren.com/en/the-five-automations-that-launch-fashion-4-0/#respondMon, 17 Jun 2019 06:08:29 +0000https://gabrielfariasiribarren.com/las-cinco-automatizaciones-que-lanzan-la-moda-4-0/I have called neorelocalization the process of the return of fashion manufacturing to locations near the European and U.S. markets. My objective in putting the prefix “neo” before the word relocalization is nothing more and nothing less than to distinguish the current process from previous returns of the industry to nearshoring because of the clear differences that exist between one and the others.

For the same reason I think it is very convenient to use the term fashion 4.0 to refer to the fashion industry conceived or revamped from the development of new technologies that lead to automation, robotization and massive interconnection of manufacturing units.

This is how in 2016 Modaes already ventured into the analysis of the process and they reported on it in the post Moda 4.0. Today, with the same approach to the future, they use the term correctly to promote the next Innovation Fashion Forum 2019 under the title: Fashion 4.0: Technology to transform the industry.

Fashion 4.0 is interconnection, automation and robotization

Before fully understanding the automation landscape in apparel production and its potential effect on local and nearby manufacturing, fashion and retail companies must have a deep understanding of new technologies. In the abovementioned report, the professionals at McKinsey make a wise selection of these technologies that participate in the new garment production processes. In this way they identify the five most important automation technologies that drive the most promising change in fashion production.

Based on the prospection of current and future automated processes in garment production, these five technologies emerge that have a high potential to generate a strong economic impact if we analyze the possible reduction of labor costs and capital investment required.

The automation of the sewing and logistics process generates a radical transformation in the level of efficiency of the current systems used. Furthermore, we must point out that the new procedures are becoming a reality thanks to new technologies in the adhesive-gluing processes applied to flat fabrics, the robotic production of knitted garments and the innovative denim finishes.

1. Sewing.

Sewing is the most labor-intensive process in making a garment; it accounts for more than 50% of total work time per piece. The possibility of reducing labor input is largely subordinated to the type of item and its design characteristics. With the new technologies under development, up to 90% of the sewing could be automated in simple garments.

While a wide variety of semi-automatization systems are already in use in today’s fashion industry, such as Sip Italy machines, it is impossible to observe a similar scenario for 100% automated sewing processes. However, we could say that SoftWear Automation is at the forefront and that other companies, such as Sewbo, are investing heavily in R&D.

2. Storage and intralogistics.

After the sewing process, this is the most labor-intensive and error-prone phase in the manufacturing of apparel and fashion accessories due to the difficulties associated with the collection process. Robotics in intralogistics and in the storage procedure can reduce the need for labor by 50%, minimize processing time, errors and optimize worker ergonomics. An example of this is Amazon Robotics.

Today, these new technologies include suspended garment storage systems, which occupy the empty airspace of warehouses and depots, sorting and collecting items that are ready for display, and self-propelled storage vehicles that can stow, haul and unload items.

3. Adhesive gluing

New adhesive-gluing technology has enabled sports brands to avoid sewing and add functionality to high-performance garments. However, the time when only sports brands used the gluing technique to increase and optimize water resistance is now a thing of the past. Today, adhesive technology is used by fashion brands and even in the luxury segment and high-end design. Combined with robotics, the gluing system has the ability to significantly reduce the need for labor and, above all, increase manufacturing speed.

4. Knitted fabrics.

Technological advances in the manufacture of knitted fabrics, such as three-dimensional and computer-controlled weaving, allow for customization, improvements in design and fit. For these reasons, knitwear is more versatile and its commercial value is increasing, which is likely to encourage fashion brands to move from flat fabrics to knitwear.

Nike’s Flyknit line, for example, has been created from a computerized weaving process that reduced material waste by 80%. Innovations in knitted fabrics greatly encourage the production of customized items and promote the new concept of in-store manufacturing.

5. Finishing.

Automated finishing-whether by laser, abrasive, digital printing or other-is fast, low-cost, and low-labor-intensive. These new possibilities – such as Jeanología or Vav for example – make it possible for a brand to carry out the finishing phase locally or in proximity, even for the articles manufactured in Asia, and add personalized details in the store. Abrasives can reduce labor by up to 90% and digital printing by up to 70%.

Traditional Manual Process vs. Automated Process

A factory operator holds worn jeans in his hand. To deliver the production with the same design, exactly as the sample, the worker uses sandpaper to “break” and wear the fabric and applies chemicals to generate other effects as instructed in the technical data sheet of the model. This laborious manual process takes 20 to 30 minutes per pair of jeans.

With the new automated process, we start from a digital image of the designed “jeans” that contains the instructions of the final finish that the laser technology can decipher and then reproduce the design – torn, moustache, worn off, among other effects – taking only one and a half minutes.

This new process allows brands to manufacture jeans in Asia, ship the unfinished items to the markets, and then finish them in nearby locations. This offers many advantages for fashion companies as they can try out different styles, quickly reproduce best-selling finishes and have them ready in stores in a matter of days or even hours.

Bottom line

It is very obvious that for certain items, automation will not only make nearshoring more appealing to fashion and retail brands in Europe and the USA, but will also make local production viable again in the future from an economic and commercial perspective, as each and every one of these automations and new technologies are adopted.

The future of fashion 4.0 is very exciting!

]]>https://gabrielfariasiribarren.com/en/the-five-automations-that-launch-fashion-4-0/feed/0Service fashion will be instant and intelligenthttps://gabrielfariasiribarren.com/en/service-fashion-will-be-instant-and-intelligent/
https://gabrielfariasiribarren.com/en/service-fashion-will-be-instant-and-intelligent/#respondThu, 06 Jun 2019 06:06:05 +0000https://gabrielfariasiribarren.com/la-moda-de-servicio-sera-instantanea-e-inteligente/The fashion of the future will be very different from the current one. The innovation spawned by new technologies and the new global digital customer has the ability to completely change the way fashion items are made, purchased and consumed. Rising trends and global forces shape customer behavior, as well as the function of brands and retail, in a more volatile way than ever before.

In order to understand this new phenomenon affecting the fashion sector, Global Fashion Agenda & The Boston Consulting Group have analyzed disruptive developments in other industries under the vision and contribution of industry leaders in terms of the organization of scenarios and digital irruption. Based on these findings, they offer three new business model scenarios for the sector and the fashion industry: fashion as a service, instant fashion and intelligent fashion.

Both institutions report that these new scenarios are not predictions, but a visionary and medium-term result on the fashion of the future. At the same time, they call for reflection on how organizations should be planned and prepared for tomorrow. The fashion industry has to be very focused on recognizing trends that challenge its business model in the preliminary phase and generating efficient responses that lead to continued and sustainable growth.

1. Fashion as a service

The idea of sharing comes to fashion to encourage and drive the much-publicized concept of reuse. Just as today’s consumers subscribe to software as a service (SaaS) instead of purchasing it directly, fashion customers rent their clothes. By drastically reducing the need (or obligation?) to manufacture we will drastically reduce the fashion industry’s environmental footprint. The neo-relocalization of fashion sourcing promotes fashion as a service to seduce new generations of conscious consumers, including the Z generation.

2. Instant fashion

Fashion customers order and receive the items they buy, when and how they want them, using new technologies such as 3D printing or others that meet the goal of on-demand production that can be implemented even in the store. The environmental footprint of a production model under this framework is reduced and the competition to meet consumer demand increases considerably. This means moving from the supply-driven model to the demand-driven model and to the ultra-personalization of fashion items.

3. Intelligent fashion.

Clothes will have the electronic ability to adapt and adjust instantly to the wearer’s needs. Intelligent fibers allow garments to alter their colors and through this feature the environmental impact is reduced by minimizing the

Reality and hope in fashion

Fashion faces a reality that is recognized and it has an enormous challenge to change it in order to reduce its social and environmental footprint. We all have well-founded hopes that brands and retail respond to the call for collaboration and that the development of these new guidelines will materialize once and for all in the reality of the sector. Only the joint effort of the players in the sector will ensure that many of these innovations and developments reach the necessary scale. Even in the best situation, this requires joint investments and efforts over many years. The need to generate value in order to change reality is as important as ever and more urgent than ever. Let us trust and be confident that the creativity and commitment of leading players have the capacity and ability to generate a thriving fashion industry that respects society and the environment.

It will be a pleasure to meet you again in this same blog with the analysis of the annual report Pulse of the Fashion Industry 2019. In the meantime, we are confident that fashion will continue to follow the path of sustainability and that its pace towards circular fashion will be increasingly steady and frenetic.

Thank you for following this blog!

]]>https://gabrielfariasiribarren.com/en/service-fashion-will-be-instant-and-intelligent/feed/0The Pulse of the Fashion Industry 2019https://gabrielfariasiribarren.com/en/the-pulse-of-the-fashion-industry-2019/
https://gabrielfariasiribarren.com/en/the-pulse-of-the-fashion-industry-2019/#respondFri, 31 May 2019 06:08:43 +0000https://gabrielfariasiribarren.com/el-pulso-de-la-industria-de-la-moda-2019/The annual report The Pulse of the Fashion Industry 2019 – available for free download at the end of this article – shows that the fashion industry has improved its social and environmental performance over the past year but at a slower pace than in the previous year. Despite this improvement, the fashion industry is still far from sustainable. In addition, the findings show that companies in the sector are not implementing sustainable solutions fast enough to counter negative environmental and social impacts.

If measured performance remains on its current trajectory, the gap between industry output and the pulse score on its defined curve will widen. About 40% of the industry has not yet reached beyond the first phase of the Pulse Curve. This means that if the industry does not implement changes at a faster pace, it will not be able to meet the United Nations Sustainable Development Goals or comply with the Paris Agreement.

Fashion leaders must take the lead

The Global Fashion Agenda, Boston Consulting Group and Sustainable Apparel Coalition are calling on industry leaders to step up their pace toward deeper, more systemic change. Businesses must push harder, with focused and coordinated efforts, in order to overcome the technological and economic constraints that hinder progress.

Growth in the Pulse Score dropped by one-third in 2019. The 2019 Fashion Pulse Score increased four points from last year, from 38 to 42 points (out of 100), compared to six points in 2018, which means that the speed of measurable progress has slowed by one-third.

While continued progress is encouraging, its decreasing speed is a cause for concern. In the last two years alone, the apparel and footwear industry grew by between 4% and 5%, in line with projections up to 2023 that show annual growth of about 5%. This is mainly due to growing demand in Asia-Pacific and developing countries. By 2030, the global clothing and footwear industry is expected to grow to 102 million tons in volume and USD 3.3 billion in value.

The Sustainable Development Goals estimated that global carbon emissions should be reduced by 45% from 2010 levels by 2030 if global warming is limited to an increase of 1.5°C and net zero carbon emissions are achieved by 2050. Even under optimistic assumptions, existing industry solutions and the speed of progress will not produce the impact needed to transform the industry. The fashion sector needs deeper and more systemic change. Let me remind you that in previous editions (2017 and 2018) we talked about a joint effort of the fashion industry. This concept, given this last result, becomes more relevant than ever!

Without improvements in environmental and social standards through the expansion of existing sustainable practices, the adoption of more efficient business models and the implementation of transformational changes, the gap between industry growth and the Pulse Score will widen even further. This could have a serious effect on the long-term environmental, social and financial prosperity of the fashion industry and the planet.

Behavioral guidelines

Most of the improvements came from two segments: small players in the mid-price segment and medium and large players in the entry price segment. It is encouraging to see the efforts spreading among the smaller companies in the entry price segment. This movement through the initial phases of the Pulse Curve was achieved by companies that adopted sustainability strategy development and governance, set goals, implemented best practices and aligned their partnerships to the association.

These important preparatory changes will take time, usually about two years, to translate into a traceable success along the Pulse Curve. Meanwhile, the pioneers showed less measurable progress, as their work to scale up solutions and deepen proven initiatives in the value chain does not necessarily translate immediately into score gains. In addition, addressing problems that require innovation or changes in business models requires collaborative action.

Conscious consumers are an increasingly important but insufficient driver

As the media and social networks shed light on social and environmental responsibility in the fashion industry, consumer concern is growing. Mention of sustainability in social networks increased a third faster than the overall growth of social networks between 2015 and 2018. Awareness is higher among younger people, especially Millennials.

This awareness is beginning to have a greater effect on consumers’ purchasing decisions, as more than a third of respondents report switching from their preferred brand to another for reasons related to responsible practices. More than half of respondents said they anticipate that their next purchasing decision will be based on these practices.

or the first time, these data confirm that most consumers include sustainability considerations in their decision-making process. These results indicate a shift in the importance of these considerations and represent a strong signal to the industry. This clear trend will continue to grow. It is only a matter of time before responsible practices become fundamental to decision-making factors when purchasing a product.

However, consumer considerations of sustainable practices are not yet powerful enough to be the most important driver of purchasing behavior. Quality and aesthetics continue to dominate decision-making. For 7% of consumers, sustainability is the most important decision-making criterion. The industry cannot wait for the consumer to lead this movement; it is up to fashion leaders to take bolder steps today for the transition to tomorrow’s sustainable industry.

I will start this post with a review of what was discussed in the last five articles. The goal of this summary is to see the complete development of this new phenomenon in order to be able to appreciate it in all its magnitude and later to continue analyzing the rest of the processes that constitute it.

With the addition of the prefix “neo” I try to distinguish this new process from the previous ones because it is essentially different from them. The present process is the result of advances in the automation of production processes and sustainability. We return to manufacturing locally or in close proximity but in factories very different from those of our grandparents.

After this summary, we continue with the analysis of one of the two fundamental bases of neorelocalization which is the automation and robotization of production processes. The other is sustainability.

Automated and robotized fashion.

While mass-market fashion brands are moving toward a versatile supply system, focused on demand and increasing labor costs, automation has a leading role in improving the level of efficiency, increasing production capacity and achieving greater flexibility. And it is vital to optimize the financial capacity of local and nearby manufacturing systems.

However, as we all know, the fashion industry lags behind other sectors in terms of robotization and process automation. In the automotive industry, which is the most automated, seven times as many robots are installed as in the clothing industry; in electronics four times as many. Although some apparel manufacturers have begun to invest in automation, neither automation nor advanced manufacturing has been considered a priority for mass-market and retail fashion brands for a number of reasons that we will explain below.

Asia plus low cost origins Vs. nearshoring plus automation.

One of the reasons, perhaps the most compelling, why automation in the fashion industry is so low has been that companies, fashion brands and apparel buyers have gained significant advantages from the low labor costs of major Asian sourcing markets. This has generated significant advantages but also excessive dependence. So dependent have they become on the “low cost” that even today, with the increase in the cost of Chinese labor, they continue to rely to a lesser or greater extent on this same sourcing strategy, relocating their productions to new low-cost markets such as Bangladesh and Ethiopia. Because of this same strategy, over the last 30 years, global brands and industry leaders have focused along with suppliers and manufacturers on improvements over traditional efficiencies by following process optimization techniques, as well as compliance and sustainability measures.

Another reason has been the technical challenges derived from automation, especially with regard to the sewing process, as soft fabrics have proven to be very difficult for robots to handle. While semi-automatization has been applied in factories all over the world for several years, it has been a relatively short time and after many tests and developments that the complete automation of the sewing process in soft fabrics is ready for the mass market. In addition, the fragmentation of the industry has hindered investment in automation technologies.

Automation makes the “demand model” possible.

As fashion production follows the new demand model and new technologies are developed, automation becomes apparent to all players in the US and European mass market for apparel, especially for local production and nearshoring.

In the next post we will analyse this development in depth. First, we will explore new automation technologies according to their complexity, their potential to achieve reduced labor costs and the need for capital investment. We will also explore the opportunity to transform automation and nearshoring into a decision-making roadmap at product and design level. Finally, we will provide a vision of the future for the adaptation of automation in the sector in accordance with the vision of the international consulting firm McKinsey in the aforementioned report.

Conclusion and a query

In this battle, where the contenders are Asia plus low cost origins Vs. nearshoring plus automation, it is relatively easy to predict who will ultimately win. If we look at the second term of the equation we realize that nearshoring plus robotization-automation equals neorelocalization 4.0.

I have no doubt about who will win! Which one do you think will be the winner?

]]>https://gabrielfariasiribarren.com/en/automation-and-robotization-generate-neorelocalization-4-0/feed/0Neorelocalization is the ultimate fashion disruptionhttps://gabrielfariasiribarren.com/en/neorelocalization-is-the-ultimate-fashion-disruption/
https://gabrielfariasiribarren.com/en/neorelocalization-is-the-ultimate-fashion-disruption/#respondMon, 06 May 2019 06:08:51 +0000https://gabrielfariasiribarren.com/la-neorelocalizacion-es-la-maxima-disrupcion-de-la-moda/Throughout 2018 and even in the immediately preceding years, the common denominator of fashion and retailing has been volatility. During all this time I have tried, with more or less success, to shed light on the sector and industry forecasts. I must confess that it is very difficult, at times frustrating, not to clear that “thick layer of uncertainty” that covers the present and future of fashion.

During this process I have read and re-read every report that has come into my hands. I have even had reports translated from German and Japanese for the sole purpose of looking a little further, getting clarity and sharing it on this blog.

Among the reports that I have re-analyzed is that of the international consultant firm McKinsey & FOB – The State of Fashion 2019.

I can assure you that it has been productive and comforting! Experiencing Q2 2019, we can see how the forecasts made by the specialists of the international consulting firm are taking part in the reality of the sector. Although I recommend you to read the report that you can download for free in the link above, I will offer you a preview of the analysis and its conclusions.

The State of Fashion 2019

The report examines, describes and provides exhaustive information on the world economic situation, consumer shifts and disruptions in the fashion system. Below I share with you a summary of the content that constitutes the backbone of the report.

I- Economía Mundial

1. Caution for the future.

Key economic indicators with their downward movement and other destabilizing movements unfailingly generate a cautious attitude for the future.

With forecasts of a slowdown in the global economy in 2020 (there are even well-founded comments about a future world crisis), the directors of organizations have become much more cautious and are encouraged or forced to explore more aggressively new possibilities to increase productivity.

70%: Fashion managers consulted who have been concerned about the global macroeconomic outlook for this year.

2. India y su ascenso

2. India and its rise

India is slowly but surely becoming a benchmark market for world fashion. A growing middle class, with significant upward social mobility and a strong local clothing industry. Of course, international fashion players must do their best in a market that is heterogeneous and represents a major challenge from its social perspective as it is home to an educated demographic group in contact with the latest global technologies in direct relation to another part of the poor population. India, anti-apocalypse retail is an analysis of this situation and explains in depth this exciting process and why the country is heading in a direction opposite to the mature fashion markets.

690 million: the number of smartphone users in India projected for 2022. 2.3 times the number of users in 2017.

3. Trade 2.0

Contingency plans to deal with future changes in the global value chain are essential in all organizations. On the one hand, the commercialization of clothing and fashion accessories could be affected by the creation of new tariff barriers, trade disputes and current volatility and on the other hand, new opportunities are generated from the growth of South-to-South trade and the re-establishment and updates of new trade agreements.

62%: the number of McKinsey respondents who believe that variations in foreign trade policy will generate potential risks to global economic growth. This appreciation has been growing with respect to last year’s report The State Of Fashion 2018.

II- Shifts in the consumer

4. End of property

As the business model of second-hand, refurbished, repaired and rented clothing and accessories continues to evolve, the lifespan of the fashion product will become increasingly elastic. Fashion players will look and act more frequently on this business to access new market niches and consumers who are moving away from permanent ownership of clothing.

44%: this is the percentage of managers consulted who assume that the second-hand business model will be more relevant in 2019 than in 2018.

5. The awakening

The deep and genuine interest of the new generations in social and environmental causes has reached an important critical mass. This has resulted in brands being much more attentive and driven towards their goal of attracting both new conscious consumers and talent. Customers in some, but not all, markets will reward players who take a clear and solid stance on environmental and social issues beyond traditional CSR.

6.3x: the number of times they estimate that the word “feminist” will appear on home pages and in retail publications in 2018, compared to 2016.

III- The fashion system

6. Now or never

In the journey of the mobile consumer, the temporary space between the discovery of the product and its actual purchase has become a conflict zone as the current fashion consumer is much more impatient, looking to buy exactly the models they discover and they want it immediately. It is the new digital and global client.

Market players will focus on reducing this gap through optimal or shorter delivery times, having greater and faster availability of products advertised in stock and with the help of new technologies such as visual-virtual search and augmented reality.

24h: In 2018, Amazon customers in the U.S. required deliveries within 24 hours, compared to expectations of a 9-day delivery time in 1995.

7. Maximum transparency

For a long time, organizations have possessed and managed their customers’ personal data. Today, a new, more suspicious consumer wants companies to respond with maximum transparency. For companies to be able to meet this new commitment to trust that their customers demand of them, they must offer a higher level of transparency, radical transparency, in dimensions such as value for money, creative integrity and data protection.

65%: is the number of respondents who indicated “the needs of consumers to rely on product authenticity and creative originality” within the 5 main trends for this year.

8. Self-disruption

Fashion brands, even the most traditional ones, have begun to change their own business models, image and offering in response to startups and a new generation of emerging brands. The latter have grown, accelerated and gained market share thanks to declining customer loyalty to the traditional brand and a growing appetite for the new. We expect more brands to follow this path of self-disruption, which will likely have a significant impact on their operating models.

#1: Self-disruption has been ranked in that position and has remained the most prominent trend within the forecasts made by fashion executives.

9. Digital Usurpation

As the race to be the digital platform of reference for both consumers and brands grows, the major players in global e-commerce will continue to innovate, develop and add services. This will be achieved through purchases, partnerships, investments or in house R&D&I. Players who diversify their business model and ecosystem will improve their leadership over those who remain pure-players because the latter will depend exclusively on retail margins.

The mass players are the next to experiment, responding more quickly to trends and consumer demands, generating a just-in-time production, reducing excess stock and reconverting short production cycles and small batches into the new industry standard.

2018 and 2025: Different levels of aspiration for a change towardsnearshoring which will double between 2018 and 2025.

Neorelocalization.

I have no doubt that this new process, which staged the return of the vertical fashion industry to nearby sourcing origins, constitutes the greatest disruption to the sector.

I have called this “new return” the “neorelocalization of fashion“. The addition of the prefix “neo” is to differentiate it from the previous ones, because unlike these, this return comes from hand in hand with robotization, automation of production processes and sustainability. Nearshoring will return, but the neorelocalization factories are nothing like those of our grandparents.

Let’s meet again in the next article!

]]>https://gabrielfariasiribarren.com/en/neorelocalization-is-the-ultimate-fashion-disruption/feed/018 Global Effects of Neorelocalizationhttps://gabrielfariasiribarren.com/en/18-global-effects-of-neorelocalization/
https://gabrielfariasiribarren.com/en/18-global-effects-of-neorelocalization/#respondMon, 22 Apr 2019 06:08:12 +0000https://gabrielfariasiribarren.com/18-efectos-globales-de-la-neo-relocalizacion/In this new article we continue to analyze the incredible process of the return of apparel and fashion manufacturing from Asia to nearby locations. I have called this budding phenomenon “the neorelocalization of fashion production” to distinguish it from previous relocation movements, because although it entails a return of production closer to the most important global fashion markets – Europe and the US – it differs from others because this time it comes hand in hand with production automation and sustainability. That is to say, we will go back to nearshoring or even to local manufacturing but the factories will not be like those of our grandparents.

Eighteen disruptions of neorelocalization

1- Nearshoring in order to gain market share and recover margin with greater speed and agility.

To be successful in the current fashion market, a substantial part of the total production volume must be planned for a fast fashion cycle. To make this possible, we must place fast fashion manufacturing orders in nearby locations (nearshoring). Even today, many companies produce fast fashion in Asia and “fly” the garments to their distribution centers in Europe and America for their subsequent delivery to stores. Of course, this model causes a significant loss of margin due to the high cost of air transport. This is what we analyzed in this previous article – Neorelocalization of fashion: speed and agility to compensate for the loss of margin – one of the current issues in retail.

2- Shrinkage of industrial capacity in Asia.

The new laws regulating the sector with regard to sustainability and CSR, the constant increase in costs and the growth of orders from the local market, reduce the productive capacity destined for exports and generate scarcity problems for the manufacturing of some categories of products. This new situation pushes fast fashion brands to move a large part of their current production from Asia to nearby sourcing countries.

3- Asia is gradually losing its status as low-cost origin.

The increase in Asian labor costs is unstoppable and greater than in the rest of the world. Therefore, Asia will no longer have low-cost countries compared to Africa, Eastern Europe and Central America. I recommend you to read this article about this exciting process: Global Fashion Continues to become global.

4- Review of international trade agreements.

The political volatility, the commercial war between USA and China and the revision of the global trade agreements gravitate and modify the analysis and the final decision of fashion companies regarding outsourcing or nearshoring.

5- New industrial infrastructures in proximity.

Significant investments will generate industrial clusters with high capacity of production and manufacturing of garments in the nearby origins. Examples: Eastern Europe and Central America.

6- The production of fabrics follows the relocation of the CMT and leads to the indispensable vertical industry.

7- Regressive integration of brands.

Among the different possibilities analyzed by fashion brands and retailers to guarantee their production capacity in proximity is that of boosting their strategic suppliers or partnering with them to invest in factories in these countries of origin. Having and securing this production capacity makes the difference between reaching or not reaching the speed-to-market and agility.

8- Global and consolidated suppliers.

Robotization in the apparel industry will generate greater efficiency in the production process and this will lead to a global consolidation of suppliers. Thus, global fashion manufacturing will be in the hands of international mega-suppliers.

9- Manufacturing technology will be an important competitive advantage.

Advanced manufacturing will become an important competitive advantage. For example, intellectual property will be integrated through exclusive partnerships with technology companies, through acquisitions of technology companies, or as a component of the development of fashion brands themselves. Do you know which the most successful relationship is today?

10- Manufacturing technology open to the market.

Advanced manufacturing will be openly available in the market, with 100% of intellectual property belonging to the technological companies that have developed it.

11- Fully automated manufacturing for simple garments.

Automation will cover simple garments to a greater extent. For example, the production of T-shirts will be fully automated with a reduction of more than 80% of the labor needed.

12- High degree of automation in the production of complex garments.

Complex garments, such as jackets and dresses, will be manufactured semi-automatically and with a reduction in labor of more than 40%.

13- New business models.

New business models will be created based on automation and neorelocalization. A clear example of these is the personalization of fashion garments and accessories. These new businesses will become a key part of the market and they will become the energy that boosts the growth of fashion companies.

14- Automation of production on demand.

In nearshoring, manufacturing on demand (including 3D printing) through automation will be one of the keys to making new business models possible.

15- Sustainability is a key purchasing factor.

Sustainability will become a relevant aspect for the global and conscious customer when making the purchase decision in the mass market. Here you will find the most complete international report on sustainable fashion: The Pulse of the Fashion Industry.

16- Brands and retail will benefit from a clear and strong positioning in sustainability and CSR.

Fashion brands and retailers will obtain a greater market share by defining a strategic positioning with respect to the budding concept of circular fashion.

17- Recycling of textile fibers on a large scale.

Technological advances make it possible to increase closed-loop recycling so that more than 20% of the fiber in used garments is recycled.

18- Service-based fashion.

New business models will be created around service-based fashion. An example is the rental of clothing with the aim of increasing its use throughout the lifespan of the garment, especially in the case of low-consumption items. And perhaps we will see leading global brands selling their own garments in their own stores (you may be thinking this is the norm)… being those second-hand items.